Uber Highlights The Importance Of Responsible Corporate Law Practices

Articles Tagged with: Birmingham Corporate Attorneys

Uber Highlights the Importance of Responsible Corporate Law Practices

On June 21, the Harvard Business Review featured an interesting article on the downfall of Uber; an article which highlights the importance of companies ensuring that they work with the right corporate law counsel in order to ensure that their entire business model isn’t predicated on lawbreaking.

Uber set an important precedent for the business of transportation, a model that made vast improvements to the entire concept of taxicab transportation in general. Its major advantages didn’t involve the use of modern dispatch with GPS or Smartphone apps—as incumbents were already headed in that direction—but rather in using regular, everyday vehicles minus the special licensing and formalities. However, in using everyday noncommercial vehicles, Uber avoided the many costs that the taxicab companies couldn’t when it came to having to purchase commercial registration, insurance, inspections, and plates, specific driver’s licenses, background checks, and the many other costs of doing business and following the law.

Blatant Violation of the Laws

Instead of focusing on developing a business model that could both offer customers a new, unique service, while also complying with the law, the company, instead, focused on “defending its illegality”: employing staff to lobby legislators and regulators, and portraying those who disputed its setups as has-beens stuck in the past.

While some jurisdictions bent and new law was created in order to accommodate this business model, in general, the model simply remained illegal. And in doing so, Uber’s employees took risks; risks that even got some of them indicted and arrested under some circumstances.

The Role of In-House Counsel

So who, specifically, was responsible? A company’s attorneys are supposed to advise them on how to run their business in accordance with the law. At Uber, however, in-house and corporate counsel was, arguably, complicit in fostering a culture of illegality in this case.

Uber then began attacking the competition, making public statements to what extent the competition (companies like Lyft) were breaking the law; pointing out their failure to comply with the law when it came to lacking commercial insurance and licenses; all the while adopting Lyft’s approach and normalizing a model based on regular legal violations. This practice may ultimately lead to the company’s downfall; a downfall that could have easily been prevented had it been advised–by in-house counsel–about how to retain what was great about the business while also operating within the confines of the law.

Experienced Birmingham & Mobile Corporate Counsel

At Cloud Willis & Ellis, our business and corporate lawyers can assist you with all aspects of your business needs and ensure that you offer a unique, successful business model, all while following the law to a T.

From forming a business to developing an exit strategy, selling or purchasing ownership interests, we assist business clients in resolving a variety of issues and conflicts. We have a proven track record of assisting our corporate clients with expansions, reorganization, restructuring, commercial workouts, and other options.

Whatever your needs, we can provide you with counsel and value adding solutions necessary for navigating through every business situations. Contact us today to find out about our corporate law services.

Resource:

hbr.org/2017/06/uber-cant-be-fixed-its-time-for-regulators-to-shut-it-down

U.S. Corporate Law & Culture: Does It Discourage Businesses Seeking Positive Social Impacts?

On May 18^th, Harvard Business Review published an interesting article on how existing laws and regulations can sometimes interfere with the desire that businesses have to structure their businesses in such a way as to have a positive social impact. Specifically, the article looked at to what extent U.S. business laws are oriented towards shareholder primacy, and how both law and culture affect how companies think about purpose.

According to the article, many business leaders point out that, while they would like to structure their businesses as to have a positive social impact, they encounter two recurring obstacles in trying to do so: 1) a culture of short-termism and 2) corporate law placing shareholders first. In this respect, working with a corporate attorney during your business entity formation and/or in restructuring your business can be helpful in figuring out what your options are if you’ve found yourself frustrated in this respect.

“B Corps”

In the U.S. and around the world, there are companies (known as “B Corps”) that have signed up to have their social and environmental performance assessed by an organization called B Lab. There are now approximately 2,000 of these companies around the world, often redefining the idea of success in business to include both social and environmental goals in addition to profits.

What the researchers who published the article found was that there are more B Corps in countries that are culturally more oriented toward the short term because in these cultures, entrepreneurs interested in building purpose-driven organizations feel the need to engage with entities like B Lab. Conversely, in long-term oriented cultures, entrepreneurs feel more compelled to pursue this type of purpose under more traditional structures.

Interplay Between Culture & Law

In addition, according to the article, they also found more B Corps in countries with a higher degree of shareholder primacy in the law, indicating that both culture and law affect to what extent purpose-driven companies can achieve scale and profitability. However, unfortunately, conversations involving culture and law typically happen independently of one another, which isn’t necessarily conducive to creating a more sustainable form of capitalism in this respect.

In this sense, the article called for a cultural shift away from short-termism in order to effectuate overall change in corporate law in an effort to support business leaders interested in promoting purpose-driven entities.

Experienced Business & Corporate Law Attorneys

At Cloud Willis & Ellis, our experienced business & corporate law attorneys can assist you with any and all aspects of structuring (or restructuring) your business. We are able to work in a similar capacity to in-house counsel by focusing on what is best for your business needs and how we can be the most effective legal counselors possible. One of our main focus areas is business entity formation, for example, and this includes helping businesses structure themselves in a way as to have a positive social impact. Contact us today to find out how we can provide you with assistance here in Alabama.

Resource:

hbr.org/2017/05/how-laws-and-culture-hold-back-socially-minded-companies

Commercial Dispute Negotiation and Resolution Options in Alabama

Business disputes come in a variety of forms and can range in severity from mild inconveniences to serious issues with the potential to bankrupt your company. Fortunately, there are several ways in which business disputes can be resolved. In Alabama, disputes are frequently resolved via negotiation, mediation, arbitration, or in court. If your company is facing a business dispute that needs to be resolved, consult with a competent corporate law attorney in order to discuss your case and select which dispute resolution avenue is most advantageous given your situation.

Negotiation

Negotiation involves any communication between two or more parties in order to reach an agreement or compromise. Negotiations are entered into voluntarily, can be as formal or informal as the parties wish, and involve only the parties and their representatives without a third party neutral leading the process.

Mediation

Mediation is a process that adversarial parties engage in with the aim of settling a dispute or controversy with the help of an independent third party, or mediator. It is the mediator’s job to facilitate open communication and dialog between the parties. Mediation.com notes that most mediations encompass the same key qualities:

Voluntary: Parties engage voluntarily in a mediation and are allowed to leave at any time and for any reason.
Controlled: Each participant has complete control over the outcome of the mediation. In other words, both parties must agree to every term of the resolution and will never be forced into an agreement that they are not comfortable with.
Confidential: Mediations are generally confidential, meaning that everything said and any documents presented during the course of the mediation are not admissible in a subsequent court proceeding (except for the finalized mediated agreement).

Arbitration

Arbitration is similar to mediation in that during both processes the dispute is submitted to neutral third parties for help. However, arbitration is binding, while mediation is voluntary. Arbitration proceedings are less formal than court proceedings, but the arbitrator does control the proceeding and hear evidence in a manner similar to a judge. After the parties present their evidence and arguments, the arbitrator issues a written award that is generally binding. Arbitration agreements are enforceable by a court order if the parties do not voluntarily comply.

Going to Court

Negotiation, mediation, and arbitration are all alternatives to traditional litigation and are collectively referred to as types of Alternative Dispute Resolution (ADR). However, these methods of dispute resolution are not always effective, and as a means of last resort there is always the option of asking a court to resolve your dispute for you. While many people relish the idea of having their day in court in order to prove that they are in the right, keep in mind that court proceedings can be expensive and time consuming. Sometimes putting aside your ego and giving ADR a chance before going to court can be in the best interest of your company.

Need Legal Advice?

If you have a business dispute in Alabama that needs to be resolved, contact the business litigation and corporate law attorneys at Cloud Willis & Ellis, LLC today. Our experienced dispute resolution attorneys would be happy to discuss your dispute with you and represent you in whichever form of dispute resolution makes the most sense given your particular situation. Contact our offices in either Birmingham (205-322-6060) or Mobile (251-545-4844) today.

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